Having worked at their father's bank during their youth, Butcher and his younger brother C.H. Butcher, Jr. began buying stock in numerous Tennessee banks starting in 1968. By 1974, the Butcher brothers owned or controlled eight banks, and Jake Butcher's United American Bank controlled 39% of the banking reserves in Knoxville, Tennessee. By 1982, UAB was responsible for over 50% of Knoxville's business loans and Butcher's personal net worth was declared to be about $34 million.[1] In the late 1970s, United American Bank built its 27-story headquarters, the Plaza Tower, which remains Knoxville's tallest building.[2][3] In the early 1980s, C. H. Butcher's City and County Bank began building the Riverview Tower, which remains the city's second-tallest building.[4]

Rumors circulated that Butcher would make another run for the governorship in 1982. However, he supported Knoxville Mayor Randy Tyree, who defeated State Senator Anna Belle Clement O'Brien for the Democratic nomination. Interestingly, the Knoxville Journal reported that Jake's brother C.H. supported Tyree's Republican opponent, sitting Governor Lamar Alexander.[citation needed] Governor Alexander won re-election handily.[1]

During that same year, the 1982 World's Fair opened in Knoxville, which Butcher and a group of fellow Knoxville business leaders had helped to attract. The fair was widely considered a success and brought in more than 11 million people over its six-month run. The World's Fair site is still in use today as a municipal park in downtown Knoxville. Adjacent to the main campus of the University of Tennessee, some of the World's Fair attractions are still standing and have been rehabilitated.

Also in 1982, there were rumors about Butcher's banking practices. Knoxville federal and state bank investigators had long suspected that Butcher was engaged in unlawful banking practices. On 1 November 1982, 180 federalbank regulators from the Federal Deposit Insurance Corporation simultaneously raided all of the Butcher brothers' 29 bank branches and offices, thereby preventing transfers of funds to cover their tracks.[5] Bank records ultimately led investigators on a paper trail of illegal loans, forged documents and various other forms of fraud. The United American Bank collapsed on 14 February 1983. It was the fourth-largest bank failure in US history up to that time.[5][6] Seven other Butcher-controlled banks and the Southern Industrial Banking Corporation, a state licensed loan and thrift company run by C.H. Butcher, also became insolvent during the rest of 1983, and an additional three banks in 1984. The FDIC estimated that its losses in connection with the failed Butcher brother banks would total approximately $382.6 million.[7] Later that year, it was learned that Butcher was also insolvent; his assets were listed at $11.9 million and his liabilities at $32.5 million.[1]